Market Brief: Mixed Response From Trade 'Developments'


A summary of news and snapshot of moves from today’s Asia session.

  • US and China are to resume in person trade talks in September, after Trump said discussion were already on the way later today. On Sunday, the US is set to collect a further 15% on Chinese imports worth over $125 billion.
  • Whilst this provided a slight tailwind for equities, currency markets were less convinced. AUD and NZD trading firmly lower and are today’s weakest majors (JPY and UD are the strongest). Still, NZD is still reeling form yesterday’s dire business confidence reads, and AUD is under the added pressure of weaker building approvals and housing credit. And looking tariffs which kick on Sunday, along with lower iron ore prices for AUD are also piling on the pressure.
  • Mixed data from Japan saw industrial production rebound and retail sales slump. Production rose 1.3% in July (although is -1% % YoY) with expectations for the next 1-2 months at 2.7% and 0.6% respectively, despite concerns over the trade war. Whilst this is good for the business sector, retail sales slumped by 2.5% (fastest contraction since November 2015) to take the YoY rate to -2%. Unemployment fell to 2.2%, its lowest rate since August 1992.

Up Next

  • Hong Kong Retail Sales for Jul out later today at 0830 GMT.  Data for Jun came in at -7.6% y/y/ where another round of weak data for Jul is likely to reinforce a technical recession in Q3 for Hong Kong. Q2 GDP came in at -0.4% q/q.
  • Canadian GDP is expected to rebound from 0.4% YoY to 3%. Whilst data overall continues to favour BoC not easing, a miss for GDP later today could rattle CAD crosses. However, hittig or exceeding expectations could provide a tailwind for their stock index (TSX 60) which appears to the first of the major indices to break higher form its range.

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